Ex-Forbes Lister Venugopal Dhoot And Videocon's 'Big Con' On ICICI Bank
Venugopal Dhoot, Chanda Kochhar, and her husband Deepak Kochhar were arrested by the CBI for their alleged involvement in the ICICI Bank-Videocon loan fraud case
In one of the most high-profile tumbles in recent years, the Videocon Group Chief Venugopal N. Dhoot, 71, an ex-Forbes lister, went into ignominy after the Central Bureau of Investigation (CBI) arrested him this week in the alleged ICICI Bank loans fraud case, in connivance with bank's ex-honcho Chanda Kochhar and her businessman hubby Deepak Kochhar.
Though starting in a small way in Aurangabad, initial quick successes, certain right business decisions, quick wealth flowing in led to an 'intoxication' coupled with ambitions and greed, that led to the collapse of the Group, all in less than four decades.
The paterfamilias, the venerable Nandlal Madhavlal Dhoot had a largely agriculture background, plus an Indian scooters dealership, and then he launched the modest consumer electronics company, Videocon Industries Ltd. in 1984.
Exploiting the new craze for televisions, washing machines and other domestic appliances infecting the Indian middle-class then, Videocon soon grew big to become a household entity with N. M. Dhoot's sons -- Venugopal, Rajkumar and Pradipkumar -- obediently helping their father build the businesses.
At that time, it was Venugopal -- an engineer who trained in Japan for a year, who set his targets much higher than expected by his closest associates and advisors, going about strategic tie-ups, key collaborations, lucrative acquisitions or profitable mergers with Indian and foreign companies which fed the hungry Videocon Group.
These included founding Videocon International Ltd. (VIL, 1986), and business deals with giants like Toshiba, Philips, Thompson, Daewoo and Kelvinator, that blew up the company into one of the few 'Indian MNCs', with presence in several countries.
As the Group grew in leaps and bounds, crushing many small players enroute from the 1990s onwards, everything seemed hunky-dory till the mid-2000s, say people in the know.
An ex-business associate -- requesting anonymity -- confided that even in the early-2000s, some well-wishers had voiced concerns at the 'starry rise' of the Group, which could probably end up in a 'meteoric fall' someday.
"Venugopal felt he was at the top of the world and nothing could affect him... He nurtured bigger ambitions, turning himself from a business baron to an industrial tycoon... He forayed into uncharted waters like petroleum, telecom and satellite entertainment broadcasting, realty, et al," said the associate.
More businesses implied more borrowings and the Group went about picking up huge finances from the banks, individually or as consortium -- the former said to be risky for individual banks and the latter considered dangerous for the banking sector.
Dhoot is even 'admired' for being adept at the 'art of managing banks', hobnobbing with top bankers, a fragrance of good public relations, skillfully impressing so many banks who virtually chased him to lend huge funds, at one point accumulating to around Rs 70,000-crore.
"These loans were intended to finance the other virgin ventures of Videocon Group which proved hazardous in the long run... The company didn't pay sufficient attention to funds-flow, and consequently got trapped in the vicious circle, like a dragon chasing its own tail," the associate explained.
A former President of the Federation of Indian Exports Organisations (FIEO), a top global export body feels that certain moves by Dhoot were more like 'adventures' or 'gambles', with the hope that the Group's strong image would help him sail through the storms, but sadly, that did not happen.
"We must keep in mind that in the past couple of decades, the Indian laws, banking rules, regulations, codes or norms, and attitude of the courts have drastically changed. Now, everything is visible on the system, with no scope for inhouse manipulations from the willing bankers or backdoor exit by the wily politicians," said the ex-top officer, preferring to remain in the shadows.
The Videocon Group's first signs of cracking up came when it failed in the new avenues like petroleum and gas, telecom, realty, and DTH, where things "went beyond the imagination or control" of Dhoot, leading to several fire-fighting measures that did not stop the scalding.
Meanwhile, as the Group' attention was diverted to nurturing its new sectors, the good old core businesses of consumer electronics and home appliances starved for funds and languished.
Taking advantage of the sinking ship, other big sharks from the world quickly entered with low prices that virtually decimated Videocon and it was left holding huge banks' liabilities.
In between was another loan expose from the ICICI Bank, which raised many questions of ethics, finally saw its ex-managing director and CEO Chanda Kochhar and her husband Deepak also cooling their heels in the CBI cells.
All these problems snowballed and ultimately led to the insolvency processes, a series of cases before the NCLT, a proposed 'takeover' by another rising star on the Indian business horizon, and if it fails, possible liquidation process of what was once the country's most glittering business empire.
(This story is published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)
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